business matters with Michael Barrows
Money, Money, Money...
It’s a Prudent (Business) Man’s World
I recently had a very interesting Lesson 1: and it’s simply that times of
week: Firstly, a return to a theme that I crisis always present excellent
have previously touched on in this opportunities – especially for those
1. On the Monday I found myself column: I’ve mentioned before the who have heeded Lesson 1!
in the Post Office handing over old adage, “sales are vanity, profit
a very large cheque to pay my is sanity, cash is reality”. It doesn’t All the news at the moment is
annual tax bill. Paying out so matter how many sales a business about failing businesses, but – as
much money would normally be makes if it’s not making a profit on my client company demonstrated
enough to make a grown man those sales. And that profit needs – every business failure presents an
(me) cry, but to be honest I to be turned into cash in the bank - opportunity for other businesses to
had a smile on my face. Why? enough to always be able to pay the fill the void left behind. Customers
Simple really – I knew that I’d bills when they arise (like my tax of failed businesses don’t just
been saving the money from my bill). Maintaining a good cashflow evaporate into thin air, they have to
earnings during the year and is essential for long-term business find another supplier.
so I had plenty of money in my success and is even more important
business account to cover the in these difficult times. As my And don’t forget what happened
payment. client company demonstrated, if to Joseph and the Pharaoh; during
you have enough cash available, you the seven years of famine, Egypt
2. On the Tuesday I had a meeting have a wonderful safety blanket in increased its wealth by selling some
with a client who owns a large place. of the stored grain to the starving
kitchen and bathroom supplies citizens of neighbouring countries.
company. As we discussed This is a basic truism – when
the economic climate, he was Joseph interpreted Pharaoh’s Also, as any car buyer will now
very upbeat. Not only did his dream and advised him to store find out, troubled times may mean
company have enough money in grain during the seven years of that you can drive down costs by
the bank to carry them through plenty, in readiness for the seven negotiating with suppliers who are
at least the next 12 months, but years of famine, he was teaching a desperate for your business. And for
also a local bedroom furniture fundamental business lesson. The a business, saving money in this way
company had recently gone out problem is that many businesses might be the difference between
of business, so he had taken (large and small) fail to learn this having to make redundancies and
on some of their staff and lesson, with the result that in ‘times saving jobs; or it might even be
had expanded into supplying of famine’ (aka credit crunch/ the thing that ultimately saves the
bedroom furniture. recession/economic downturn) they business from failure.
suffer commercial ‘starvation’.
3. Later in the week, I watched Take care of the cash in your
a TV programme discussing Lesson 2: business during the good times and
the effect of the credit crunch The second lesson is even it will look after your
on the car industry. The big more pertinent to the business during the
message was that, if you are economic crisis we are bad times...
in the market for a new car, now experiencing;
there has never been a better
time to head to the showrooms.
Looking for that dream Lexus?
You can virtually ask them to
pay you to take it off their
hands! In fact one car company
(Mazda) is even offering a ‘buy-
one-get-one-free’ deal on new
models!
So what do these 3 unrelated
incidents teach us about business?
For me, 2 messages stand out quite
clearly:
Michael Barrows runs Matrix Marketing & Management, a consultancy organisation providing no-nonsense, real world
solutions to help businesses grow and develop. Contact him on: Tel: 07974 210797 Email: michael@matrix-mam.com
theVINE February 2009
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